The global market for IT offshore outsourcing is anticipated to reach USD 682.3 billion by 2027, up from USD 526.6 billion in 2021. Popular locations like South-East Asia or Eastern Europe generate record-breaking revenue. But, this wasn’t the same for nearly half of enterprises, despite a sizable portion (around 56%) of outsourcing IT services and software development projects.
We have delved into the decade-long history of IT offshore outsourcing for the answers. When treated intelligently, it can offer all these answers as well as some useful information that Western companies intending to outsource may utilize to their advantage.
The best way to balance your company’s demands and goals with those of your outsourcing provider while reducing your expenditure is sometimes to use a hybrid solution that incorporates a number of different outsourced possibilities.
How Has IT Outsourcing Become a Preferred Reality?
The 1960s and 1970s witnessed the birth of what is today recognized as a global business phenomenon known as Offshore IT Solutions. In response to a growing requirement for computer automation to expand operations, major information technology businesses began to provide the service of IT staffing, i.e., supplying skilled IT experts to satisfy their IT demands.
This was the beginning of what is now known as IT staff augmentation. For almost two decades, domestic IT employment has been the dominant economic model for satisfying organizations’ IT demands. However, the staff capacity of European IT enterprises began to lag behind the economy’s development.
The business climate for the nation’s IT industry was significantly enhanced when the Bangladeshi government recognized this opportunity. As a result, the industry quickly rose to become one of the largest in the world for IT outsourcing destinations, having a substantial influence on growth.
In an effort to keep prices competitive, IT staffing organizations based in Europe began constructing “nearshore” development centers in small towns in less costly states like Georgia and Iowa. But the competition from Bangladeshi IT vendors grew more intense when some of these businesses began establishing onshore corporate presences.
This initiative was designed to improve the perception of the level of service given and to provide businesses with the option of utilizing a Hybrid Offshore IT Outsourcing approach.
As a result of the expansion of Offshore IT Solutions in Bangladesh, the first “hybrid” or “onshore-offshore” engagement model was developed by BJIT. This finding supports the view that some IT services, particularly major software development projects, are best offered locally or even onsite.
In this day and age, how can we satisfy the pressing demand for an improved and dependable engagement model?
Tech giants and startups commonly use the hybrid IT offshore outsourcing model with nearshore and onshore service providers to meet their worldwide IT and business process demands. Outsourcing customers have increasingly adopted hybrid models since they offer the best of both worlds.
Clients work with an offshore outsourcer to develop a service center, run it for a set length of time, and then transfer ownership to the client under the build-operate-transfer business model.
According to the notion, it is less dangerous because the customer pays the supplier to manage all the time-consuming activities, such as coordinating engineers and overseeing the project after it has been delivered.
Using this hybrid strategy, customers have more freedom and the opportunity to focus entirely on business management. This is a great advantage for the customer now that outsourcing of software development in Bangladesh follows certain regulatory protocols to avoid data theft while handling operations.
How does a hybrid onshore-offshore model operate?
Within the rules of the hybrid delivery arrangement, an IT service provider offers digital services relevant to identifying the client’s business needs and designing solutions to suit those expectations on the client’s side, i.e., onshore. In other words, the service provider displays one or more of its employees on the client’s website. If they have a strong commercial presence, they may be able to handle this phase of the development process from an onshore location.
In contrast, the custom software design and development, automated QA testing processes,data migration, and other offshore IT solutions are carried out overseas or nearshore, providing the client with cheaper talent costs and faster development.
The offshore IT service provider often offers business analysis and IT consultancy. Because data science is influencing business analysis more and more, business intelligence analysts may also need to be on-site. Furthermore, it is essential for the product owner to support the customer throughout the entirety of the project.
The client may also choose a representative of their choice to appear on the IT service provider’s website for the duration of the project or for a longer period of time. A person with technical and training expertise is necessary for this post. If an offshore IT service provider can station a limited number of people at the client’s site, this hybrid delivery arrangement version is the most suitable.
Tasks are assigned to the offshore developers as well as the on-site staff. The division of the task will depend on the terms of the contract between the service provider and the customer. Between 30% and 40% of the work is normally performed and finished by the onsite team, with the remaining tasks being managed by the offshore team.
However, on occasion, the offshore team will complete the remaining 40% to 60% of the work while the onsite team completes the remaining 60% to 70%, and vice versa. On occasion, the onshore and offshore workers each take on an equivalent amount of responsibility in terms of their overall workload.
Let’s discuss a couple of the projects that the onsite and offshore teams finished. Although one of the highlights of the onsite-offshore paradigm is the adjustability and flexibility of jobs, keep in mind that no one team can accomplish all of these responsibilities by themselves. Both teams have the ability to shut off their work if the project’s requirements and specifications so dictate.
Tasks to be Completed by the Onsite Team:
- Act as a point of contact between the client and the offshore team.
- Recognize the client’s requirements and collect the information the offshore team will need to create the client’s product.
- Conduct a consumer interview and use the findings to inform your initial product development strategy and design.
- To avoid or reduce any unplanned modifications that might delay the design and delivery of the product, ask the client directly whether there are any adjustments that should be made to the project.
- Cooperate to ensure that the product is produced and delivered in compliance with the requirements and standards of the client.
- Depending on the time zone of the offshore crew, modify work schedules as necessary.
Tasks that an offshore team will complete:
- Compile the pertinent information and other requirements that the onsite team discovered and use them to begin the real product development.
- Concentrate on the project’s core requirements and business objectives, and work with the client and the onsite team to discover solutions to meet them.
- The development process for the team should be communicated to the onsite team.
With BJIT, you can create your own onsite-offshore team! We have a team of managers and engineers available to assist you in bringing your software project’s vision to life! Hire offshore developers right away or get in touch with us for further details.
What Exactly are the Benefits of the Onshore Offshore Hybrid IT Outsourcing Model?
For complex, long-term projects, high-tech and sophisticated products and services, both onsite and offshore techniques provide benefits. The customer is also relieved of the obligation of managing a dedicated project team because the offshore services provider handles the administrative management of the onsite staff.
The onshore-offshore hybrid model for IT outsourcing creates several significant, and sometimes mission-critical, advantages of its own. Along with having many of the same advantages of offshore or nearshore outsourcing, such as quicker recruiting cycles and much cheaper development costs, it also closely resembles the supply of IT services on an onshore basis.
The benefits of the hybrid model are:
- Continuous Productivity: The onshore and offshore personnel’s various working time zones enable round-the-clock assistance for all project requirements.
- Clear Communication: The local onsite staff meets with the customer base to better understand the project demands and ensure complete communication. The onshore and offshore teams can stay in sync with regard to project progress through interactions about knowledge transfer.
- Economical Project Development: By bargaining with several service providers on budget comparisons, project assistance can be outsourced to a capable third party.
- Rapid turnaround: Hybrid approaches give the quickest turnaround for market problem-solving.
- Skilled Workforce: Due to the various market circumstances between nations, an analogous offshore parallel produces profitability since employment and infrastructure costs differ in comparison to local resources.
- Culture Awareness: Because the approach calls for the contact between two teams with the most diverse cultural origins, it welcomes various viewpoints on workplace culture, creating a win-win scenario for overall corporate success.
- Prudent Savings: Provision of all services from an offshore center to the client results in a cost-saving venture as compared to an onshore model, which is a major positive. The onsite team can filter important choices in project development and mitigation in advance.
To manage corporate operations at the greatest level, many firms choose the hybrid project method. This integrated strategy, which delivers the best of both onsite and offshore models, ensures business efficiency for project development at cost-effective options.
Anyone looking to combine nearshore or offshore benefits with the dependability, improved cultural alignment, communications, and strict project management process provided by Offshore IT service delivery, however, should look to the hybrid model as a unique means of ensuring this highly desired but hard to achieve combination.
BJIT was founded in 2000 and offers the best IT and software development services to businesses. Its headquarters are in Bangladesh, and it has 7 offices across the world. Through the use of our adaptable engagement models, you can take advantage of all the nearshore/offshore IT outsourcing advantages for boosting productivity and reducing costs while still retaining a strong onshore and even onsite presence that guarantees an exceptional level of communication, innovation, and quality.